Putin ready to talk about Chechnya

Reporter: Emma Griffiths

MAXINE McKEW: In Russia this festive season, there appears to be a sign of peace and goodwill from hard-line leader Vladimir Putin. The Russian President says he is now ready to work with Viktor Yushchenko, the Ukrainian Opposition Leader, if he wins the presidential election rerun this weekend. And in a more surprising move, President Putin has announced he will now work with European allies on solving the long-running Chechen crisis. This announcement is a timely one. It was 10 years ago this month that Russian forces first invaded the southern republic, sparking a conflict that is being defined more and more by suicide bombings and sieges - the most recent, of course, being the horrific attack on a school in Beslan. Moscow correspondent Emma Griffiths takes a look back at 2004, a year of violence and bloodshed.

EMMA GRIFFITHS: Throughout the centuries, Russians have endured the horror of war, state terror and the repercussions of dramatic political change. After such a history, their one common hope is for stability. But this year brought them anything but. Fear and grief prevailed instead, triggered first by a terrorist attack in Moscow's busy Metro. A Chechen suicide bomber killed 41 commuters.

WOMAN: I'm terribly afraid now - not just on the Metro, but on any public transport.

EMMA GRIFFITHS: The bombing put an end to any hope that the decade-long conflict in Chechnya might be resolved peacefully.

VLADIMIR PUTIN (RUSSIAN PRESIDENT): Russia does not negotiate with bandits and terrorists; it destroys them.

EMMA GRIFFITHS: The attack set the scene for Vladimir Putin's re-election. His victory at the presidential poll five weeks later was already a foregone conclusion. In the end, Putin won with more than 70per cent of the vote. Only one other candidate made double figures. In the first few months of his second term, Vladimir Putin strengthened his hold on Russia's Parliament, the judiciary and the media. Critics say he's becoming a dictator. His supporters aren't so worried.

WOMAN: You see, we have our own democracy, and other seats of democracy are suitable for us, but not all. That's why I prefer Russian way of democracy.

JULIA LATYNINA (COLUMNIST): The majority of Russians voted for President Putin, and this was sincere vote. We can say that they were fooled, we can say that there were some votes that were added, but the majority of Russians voted for President Putin.

EMMA GRIFFITHS: But his re-election couldn't deliver Russians their craved-for stability. There were more bombings. In the Chechen capital, Grozny, the pro-Moscow leader, Akhmad Kadyrov, was assassinated. Three months later, Chechen terrorists struck again. Two female suicide bombers boarded two planes at the same Moscow airport. The Tupelov jets crashed almost simultaneously, killing 90 people. Two weeks later, another suicide bomber again hit the city's Metro. But the next morning, this wave of attacks would soon be overshadowed by an event that would shock the world and plunge Russia into anguish and despair. In the country's south, a school in the small town of Beslan was seized by terrorists. Students, parents and teachers were taken hostage. The terrorists filmed this chilling video, showing how they'd wired the school gymnasium with explosives. They wore suicide belts and carried grenade launchers and machine guns. On the second day of the siege, there was some hope. About 20 hostages, mostly mothers with infants, were released. But for some, it was a heart-rending choice. This woman had to leave her daughter behind.

ZALINA ZANDARAVA (MOTHER): I worry about my daughter, whether she's getting anything to drink. When I was in there, I was looking after her. They don't have any water or medicine.

EMMA GRIFFITHS: Relatives feared the Russian forces would try to storm the building. The President tried to reassure them.

VLADIMIR PUTIN: The most important task of ours is to save and protect the lives of the hostages. Above all, the actions of our forces involved in the operation will be subjected to this task.

EMMA GRIFFITHS: But on the third day, all hope disappeared. I was reporting live to ABC News when the bombs began.

EMMA GRIFFITHS (FROM FILE FOOTAGE): They are telling us to move back.

JUANITA PHILLIPS: And what are the troops doing?

EMMA GRIFFITHS: There's a very loud volley of gunshots right now.

JUANITA PHILLIPS: And we can see somebody running across behind you as well.

EMMA GRIFFITHS: There are a lot of gunshots at the moment, Juanita. We have to move - I'm sorry, Juanita.

EMMA GRIFFITHS: The siege ended suddenly and horribly. Many hostages escaped, running to their loved ones and the first drink of water they'd had in days. But hundreds died. The official death toll of 329 is disputed by the school's surviving teachers and the town's residents. Instead, they say about 600 were killed.

JULIA LATYNINA: What we saw during Beslan is that Kremlin is much more concerned with the idea of discrediting and destroying the terrorists than with the idea of saving the lives of children.

EMMA GRIFFITHS: However, there was some comfort and stability for Russians on the economic front. The poor stayed very poor and the very rich became richer, except for the country's richest - oil billionaire Mikhail Khordorkovsky. Instead, he notched up one year in jail. His trial on tax evasion and fraud began and slowly dwindled into detailed cross-examination. His supporters are certain the case is politically motivated because the billionaire refused to toe the Kremlin line. Instead, he funded opposition parties and spoke out against the Putin regime. Mikhail Khordorkovsky's oil company, Yukos, also felt the brunt of the Kremlin's power. By the end of the year, the government had laid old tax bills of nearly $30 million on the firm. Its woes helped drive world oil prices to record highs. But by year's end, political instability was the No. 1 headache for Putin. A crisis reared up on Russia's southern flank. Ukraine's Opposition Leader, Viktor Yushchenko, lost the presidential elections. He and his supporters accused the pro-Moscow government of rigging the vote. International observers like Melbourne man Peter Romanov agreed.

PETER ROMANOV (ELECTION OBSERVER): People in our group bought voting coupons where you could go and vote in different areas, so I'm under no illusion at all.

EMMA GRIFFITHS: Crowds tried to storm the Parliament. They blockaded government buildings. International mediators stepped in to broker a compromise. The crisis was defused by the country's Supreme Court. It agreed that the poll was riddled with violations and called for a fresh election on December 26.

CROWD CHANTS: Yushchenko! Yushchenko!

EMMA GRIFFITHS: But beneath the political and diplomatic wrangling lay another intrigue - the dramatic change in the appearance of the Opposition Leader. Viktor Yushchenko's once telegenic face had become pockmarked and ashen. He claimed he was poisoned; that his political enemies had plotted to kill him - a claim later backed up by his Austrian doctors.

DR MICHAEL ZIMPFER (HOSPITAL DIRECTOR, VIENNA): After having conducted various blood tests, there is no doubt that Mr Yushchenko's disease has been caused by poisoning based on dioxin.

EMMA GRIFFITHS: This bizarre episode capped off a year that left Russians with few bright moments. But coupled with their hope for stability is a fatalistic acceptance that, in their country, that hope may never be realised.